Commentary: Commercial Real Estate's New Normal

Currin, Darren, THE JOURNAL RECORD

What is the "new normal" in commercial real estate? That is a
question being asked all over the nation as the industry has
experienced significant changes since the recession, and while the
market has improved, it is different from what it was prior to the
recession.

A new annual report produced jointly by Real Estate Research
Corp. (RERC), Deloitte and the National Association of Realtors
(NAR), entitled Expectations & Market Realities in Real Estate 2013-
-Turn the Page, indicates that commercial real estate investors have
been frustrated over the past five years and are ready for things to
return to normal. The problem is, the current environment is the new
normal and commercial real estate investors will need to adjust to
the new reality if they expect to profit moving forward.

Based on data from the report, investors are now coming to this
realization and are now looking for the best ways to participate in
this new commercial real estate environment to maximize their
profitability and yields.

"It is time to stop waiting for the economy and the investment
environment to get better. This is it--this is the new normal--and
we need to turn the page on the past and make the adjustments needed
to be successful for the balance of this decade," stated Kenneth
Riggs Jr., chairman and president of RERC. "Investors are facing the
challenges ahead, and commercial real estate continues to be an
attractive investment for a variety of reasons in this economic
climate."

Genesis President Terry Robinson agrees. "Things changed
dramatically in 2008, and many thought we would get back to normal
in a year or two," Robinson said. "This hasn't happened and there
has been a shift. Genesis addresses the change through our off-
market approach, but we do see that not all buyers or sellers have
faced reality yet. …

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